I don’t if anyone else noticed what I saw, but the fact that the NASDAQ confirmed a double-top formation, and the S&P, Dow, and Russell indices all confirmed head and shoulders patterns yesterday, is a bit troublesome in my opinion, in regards to the market outlook going forward. The head and shoulders formation and the double-top pattern are very well known patterns, and on the charts mentioned, they are very clear and definitive.

Now just because the patterns have been confirmed, and logic tells us there will be further downside to the market, don’t expect it to happen right away. Often times there are mini-rallies that can make investors feel that all the commotion about the patterns formed were just a false-alarm. However, these types of rallies are often short lived.

So Buyer Beware. Stormy Seas Ahead!

Here’s the Nasdaq and S&P charts…